You can’t have been around then. In 1984 catatonic people in Hospital realised that the NZ dollar was overvalued and needed to be devalued. Despite losing the election Muldoon refused to do so even though he received specific instructions to do so. This was the closest thing we have ever had to a constitutional crisis. The old bugger almost killed the economy with think big and the wage and price freeze, he then started to dig the grave by refusing to devalue and was only stopped when McLay offered to be sworn as a caretaker PM to do what was necessary. How you can blame Lange for this is beyond me.

In any event there were no overseas reserves left, the economy was in that bad shape.

Typical debate, Cullen gets criticised for “squandering” an opportunity when the reality is that he has done extraordinarily well. And the right try and spread the blame away from where it should be laid, at the feet of their leaders for historic events.

With interest rates around the world falling, and inflation on the way up, now is exatly the time to be taking advantage of being in debt.

If we had done what Key is saying we should have done (he doesn’t really believe it, of course)

Oh no, he really does believe we should have cut taxes instead of paid off debt. Perhaps he realises that cutting taxes would be mutually exclusive with the policies he now supports, or perhaps not. Or perhaps he doesn’t really support them, he just knows he has to swallow a few dead rats to win the election.

I look forward to reading the socialist stalwarts lurking around here after election day. Enjoy!

Labour set up an enquiry into those issues straight away. Guess what happened? They closed it down before it reported. They wouldn’t have done that unless the results of the enquiry were damming to Labour.

You should reread your history books or at least get one based on reality.

Muldoon squandered the country’s financial reserves. When Lange took over there were two weeks of reserves left and the Forex market was closed AND Muldoon refused to devalue even though he had been voted out.

I am no fan of quite a bit of what the Lange Government did but their hands were tied by the shenanigans of the so called economic miracle worker.

The country is in tremendous shape.

Growth has been higher than that in mineral rich Australia.

And productivity has not gone up because we are getting towwards full employment. If you sack 100,000 kiwis from their jobs you would be pleased with the productivity increase but appalled by the social carnage.

The only chance for your 30 year old to get super is to keep supporting labour. The Cullen fund and kiwisaver are there precisely to address this problem. A merchant banker would never do this because it would make the next 3 months figures look slightly worse.

Now remember that I’ve lived through real inflation when we were hitting 20% annual inflation and massive interest rates. I’m afraid I think that your ideas are totally screwed. I’d suggest that you wake up and do some economics so you can appreciate exactly how good a job the reserve bank has been doing.
You think i haven’t. And the condtions we are currently experiencing are the most similar i can remember since Muldoon. And for good reason - Cullen and Muldoon are cut from the same cloth. If it moves, tax it and then give some of it back and make the electorate feel grateful for their gain.
And if the PREFU is anything to go by we are faced with the same result as the Muldoon years - low growth, high inflation and an economy that is a basketcase. Incidently, pretty much the same as when National came to power in 1990.
And the RB has done a poor job since Bollard took over in 2002. They failed to raise rates fast enough when the housing market took off, and failed to act at all during 2005 when Cullen was out of control on his spending.

BTW: Cullen doesn’t try to control inflation. That is Bollards job.
Of course he does. Bollard is just the civil servant who gets to implement Cullen’s (and by extension - Labour’s) policy with respect to inflation (independently of course - *snigger*). The policy targets agreement is a pact between the government and the Reserve Bank, but the RB doesn’t tell the government what it’s contents will be.

And there are alternatives:
http://en.wikipedia.org/wiki/Genuine_Progress_Indicator

http://www.rprogress.org/sustainability_indicators/genuine_progress_indicator.htm

And it’s a bit rich to diss somebody for not knowing much about economics on another thread, and then to say the economists have got it all wrong on productivity measures on this thread. But I guess, consistency, hobgoblins, and all that. Mind you, it is the blogosphere, and I’m sure I’m equally guilty !

But on my hypothetical thirty year old - I don’t think they’ll be getting National Super. The long-term playing out of the Kiwisaver policy will see to that. Just as compulsory super ensure the pension is means-tested in Australia, so Kiwisaver will lead to means testing in New Zealand. So they will get to pay again.

Besides you’re daft. The Cullen fund is meant to peak on its outgoings in about 2050. Isn’t your hypothetical 30 year old also going to be a a pension bludger then? Oh thats right, they aren’t a bludger because they’ve paid (partially) for it in their taxes today.

The actual beneficeries of the Muldoon stupidities about super are pretty much on it now. Perhaps you’re suggesting that we should throw them off the pension and put them back to work to pay for their excess in 1975 onwards? I can see that going down well with the 30 year olds when they get their parents bludging off them.

The actual answer is to make sure that the short-sighted fools from the Nat’s don’t get control of the treasury benches.

But this Labour government has wasted the good times, so can’t be trusted in the bad.

Are they evil, stupid, both, or just made of fail?

Meanwhile, the two words that seem unknown to this Government are “productivity growth”. Leaving ideology aside, that is one of the major problems with Working for Families. It is a very inefficient method of transfer payment, and this inefficiency directly hits economic productivity. Oh, and that train company looks like such a productive expenditure now, doesn’t it? Unlike previous Labour governments, this one seems to have given up on growing the size of the pie, and instead thinks the economy is a zero-sum game. They are currently being proven wrong in spades.

Sigh, but why bother with arguments? When you accuse the Nat’s of “trying to destroy the economy” over the last thirty years, you are probably not amenable to arguments from facts or logic.

Well, what about history then. I seem to recall that when the Nat’s took over in 1990, Labour was faced with a forecast $5 billion budget deficit, and apologised by saying “it’s only a forecast, we’ll manage it, that’s what governments do”. And here we are, 2008, facing cash deficits of nearly $6 billion, and the best we get from the Finance Minister is “steady as she goes”.

Is this farce or tragedy?

Of course the implications of this are probably beyond some peoples level of understanding. The last thing we need is some irresponsible policy from the Nat’s destroying that for a short-term electoral advantage. But that is really the hallmark of the Nat’s. They have a strong track record of trying to destroy the economy over the last 30 years. The current lot look just as fiscally irresponsible.

“On Saturday, clearly aware that they could be facing the worst economic crisis since the 1930s, the four leaders (of Germany, France, Italy and Germany) backed Sarkozy’s call for a global summit to draw up a new international financial system to replace the one adopted at Bretton Woods in 1944.

Sarkozy urged a summit of the G8 countries, together with China, India, South Africa, Brazil, Mexico and Indonesia, by next month at the latest.”

http://www.guardian.co.uk/business/2008/oct/06/europe.germany

And, if you wanted to contemplate just how much shit might eventually be hitting the fan, it seems that it was not just mortgages that were packaged and sold on, but credit card debt too! An interesting, well worth the read analysis is at http://www.counterpunch.org/ by Paul Craig Roberts, former Assistant Secretary of the Treasury in the Reagan administration.

Go, John, GO!